G.R. No. L-770, Limjoco v. Intestate Estate of Fragrante, 80 Phil.

776
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
April 27, 1948
G.R. No. L-770
ANGEL T. LIMJOCO, petitioner,
vs.
INTESTATE ESTATE OF PEDRO O. FRAGRANTE, deceased, respondent.
Angel Limjoco, Jr. and Delfin L. Gonzales for petitioner.
Bienvenido A. Tan for respondent.
HILADO, J.:
Under date of May 21, 1946, the Public Service Commission, through Deputy
Commissioner Fidel Ibaez, rendered its decision in case No. 4572 of Pedro O.
Fragante, as applicant for a certificate of public convenience to install, maintain and
operate an ice plant in San Juan, Rizal, whereby said commission held that the
evidence therein showed that the public interest and convenience will be promoted in a
proper and suitable manner "by authorizing the operation and maintenance of another
ice plant of two and one-half (2-) tons in the municipality of San Juan; that the original
applicant Pedro O. Fragante was a Filipino Citizen at the time of his death; and that his
intestate estate is financially capable of maintaining the proposed service". The
commission, therefore, overruled the opposition filed in the case and ordered "that
under the provisions of section 15 of Commonwealth Act No. 146, as amended a
certificate of public convenience be issued to the Intestate Estate of the deceased
Pedro Fragante, authorizing said Intestate Estate through its Special or Judicial
Administrator, appointed by the proper court of competent jurisdiction, to maintain and
operate an ice plant with a daily productive capacity of two and one-half (2-1/2) tons in
the Municipality of San Juan and to sell the ice produced from said plant in the said

Municipality of San Juan and in the Municipality of Mandaluyong, Rizal, and in Quezon
City", subject to the conditions therein set forth in detail (petitioner's brief, pp. 33-34).
Petitioner makes four assignments of error in his brief as follows:
1. The decision of the Public Service Commission is not in accordance with law.
2. The decision of the Public Service Commission is not reasonably supported by
evidence.
3. The Public Service Commission erred in not giving petitioner and the Ice and Cold
Storage Industries of the Philippines, Inc., as existing operators, a reasonable
opportunity to meet the increased demand.
4. The decision of the Public Service Commission is an unwarranted departure from its
announced policy with respect to the establishment and operation of ice plant. (Pp. 1-2,
petitioner's brief.)
In his argument petitioner contends that it was error on the part of the commission to
allow the substitution of the legal representative of the estate of Pedro O. Fragante for
the latter as party applicant in the case then pending before the commission, and in
subsequently granting to said estate the certificate applied for, which is said to be in
contravention of law.
If Pedro O. Fragante had not died, there can be no question that he would have had the
right to prosecute his application before the commission to its final conclusion. No one
would have denied him that right. As declared by the commission in its decision, he had
invested in the ice plant in question P 35,000, and from what the commission said
regarding his other properties and business, he would certainly have been financially
able to maintain and operate said plant had he not died. His transportation business
alone was netting him about P1,440 a month. He was a Filipino citizen and continued to
be such till his demise. The commission declared in its decision, in view of the evidence
before it, that his estate was financially able to maintain and operate the ice plant. The
aforesaid right of Pedro O. Fragante to prosecute said application to its conclusion was
one which by its nature did not lapse through his death. Hence, it constitutes a part of

the assets of his estate, for which a right was property despite the possibility that in the
end the commission might have denied application, although under the facts of the
case, the commission granted the application in view of the financial ability of the estate
to maintain and operate the ice plant. Petitioner, in his memorandum of March 19, 1947,
admits (page 3) that the certificate of public convenience once granted "as a rule,
should descend to his estate as an asset". Such certificate would certainly be property,
and the right to acquire such a certificate, by complying with the requisites of the law,
belonged to the decedent in his lifetime, and survived to his estate and judicial
administrator after his death.
If Pedro O. Fragrante had in his lifetime secured an option to buy a piece of land and
during the life of the option he died, if the option had been given him in the ordinary
course of business and not out of special consideration for his person, there would be
no doubt that said option and the right to exercise it would have survived to his estate
and legal representatives. In such a case there would also be the possibility of failure to
acquire the property should he or his estate or legal representative fail to comply with
the conditions of the option. In the case at bar Pedro O. Fragrante's undoubted right to
apply for and acquire the desired certificate of public convenience the evidence
established that the public needed the ice plant was under the law conditioned only
upon the requisite citizenship and economic ability to maintain and operate the service.
Of course, such right to acquire or obtain such certificate of public convenience was
subject to failure to secure its objective through nonfulfillment of the legal conditions, but
the situation here is no different from the legal standpoint from that of the option in the
illustration just given.
Rule 88, section 2, provides that the executor or administrator may bring or defend
actions, among other cases, for the protection of the property or rights of the deceased
which survive, and it says that such actions may be brought or defended "in the right of
the deceased".
Rule 82, section 1, paragraph (a), mentions among the duties of the executor or
administrator, the making of an inventory of all goods, chattels, rights, credits, and

estate of the deceased which shall come to his possession or knowledge, or to the
possession of any other person for him.
In his commentaries on the Rules of Court (Volume II, 2nd ed., pages 366, 367) the
present chief Justice of this Court draws the following conclusion from the decisions
cited by him:
Therefore, unless otherwise expressly provided by law, any action affecting the property
or rights (emphasis supplied) of a deceased person which may be brought by or against
him if he were alive, may likewise be instituted and prosecuted by or against the
administrator, unless the action is for recovery of money, debt or interest thereon, or
unless, by its very nature, it cannot survive, because death extinguishes the right . . .
It is true that a proceeding upon the application for a certificate of public convenience
before the Public Service Commission is not an "action". But the foregoing provisions
and citations go to prove that the decedent's rights which by their nature are not
extinguished by death go to make up a part and parcel of the assets of his estate which,
being placed under the control and management of the executor or administrator, can
not be exercised but by him in representation of the estate for the benefit of the
creditors, devisees or legatees, if any, and the heirs of the decedent. And if the right
involved happens to consist in the prosecution of an unfinished proceeding upon an
application for a certificate of public convenience of the deceased before the Public
Service Commission, it is but logical that the legal representative be empowered and
entitled in behalf of the estate to make the right effective in that proceeding.
Manresa (Vol. III, 6th ed., p. 11) says that No. 10 of article 334 and article 336 of the
Civil Code, respectively, consider as immovable and movable things rights which are
not material. The same eminent commentator says in the cited volume (p. 45) that
article 336 of the Civil Code has been deficiently drafted in that it is not sufficiently
expressive of all incorporeal rights which are also property for juridical purposes.
Corpus Juris (Vol. 50, p. 737) states that in the broad sense of the term, property
includes, among other things, "an option", and "the certificate of the railroad commission
permitting the operation of a bus line", and on page 748 of the same volume we read:

However, these terms (real property, as estate or interest) have also been declared to
include every species of title, inchoate or complete, and embrace rights which lie in
contract, whether executory or executed. (Emphasis supplied.)
Another important question raised by petitioner is whether the estate of Pedro O.
Fragrante is a "person" within the meaning of the Public Service Act.
Words and Phrases, First Series, (Vol. 6, p, 5325), states the following doctrine in the
jurisdiction of the State of Indiana:
As the estate of the decedent is in law regarded as a person, a forgery committed after
the death of the man whose name purports to be signed to the instrument may be
prosecuted as with the intent to defraud the estate. Billings vs. State, 107 Ind., 54, 55, 6
N. E. 914, 7 N. E. 763, 57 Am. Rep. 77.
The Supreme Court of Indiana in the decision cited above had before it a case of
forgery committed after the death of one Morgan for the purpose of defrauding his
estate. The objection was urged that the information did not aver that the forgery was
committed with the intent to defraud any person. The Court, per Elliott, J., disposed of
this objection as follows:
. . . The reason advanced in support of this proposition is that the law does not regard
the estate of a decedent as a person. This intention (contention) cannot prevail. The
estate of the decedent is a person in legal contemplation. "The word "person" says Mr.
Abbot, "in its legal signification, is a generic term, and includes artificial as well as
natural persons," 2 Abb. Dict. 271; Douglas vs. Pacific, etc. Co., 4 Cal. 304; Planters',
etc., Bank vs. Andrews, 8 Port. (Ala.) 404. It said in another work that 'persons are of
two kinds: natural and artificial. A natural person is a human being. Artificial persons
include (1) a collection or succession of natural persons forming a corporation; (2) a
collection of property to which the law attributes the capacity of having rights and duties.
The latter class of artificial persons is recognized only to a limited extent in our law.
"Examples are the estate of a bankrupt or deceased person." 2 Rapalje & L. Law Dict.
954. Our own cases inferentially recognize the correctness of the definition given by the
authors from whom we have quoted, for they declare that it is sufficient, in pleading a
claim against a decedent's estate, to designate the defendant as the estate of the

deceased person, naming him. Ginn vs. Collins, 43 Ind. 271. Unless we accept this
definition as correct, there would be a failure of justice in cases where, as here, the
forgery is committed after the death of a person whose name is forged; and this is a
result to be avoided if it can be done consistent with principle. We perceive no difficulty
in avoiding such a result; for, to our minds, it seems reasonable that the estate of a
decedent should be regarded as an artificial person. It is the creation of law for the
purpose of enabling a disposition of the assets to be properly made, and, although
natural persons as heirs, devises, or creditors, have an interest in the property, the
artificial creature is a distinct legal entity. The interest which natural persons have in it is
not complete until there has been a due administration; and one who forges the name of
the decedent to an instrument purporting to be a promissory note must be regarded as
having intended to defraud the estate of the decedent, and not the natural persons
having diverse interests in it, since ha cannot be presumed to have known who those
persons were, or what was the nature of their respective interest. The fraudulent intent
is against the artificial person, the estate and not the natural persons who have
direct or contingent interest in it. (107 Ind. 54, 55, 6 N.E. 914-915.)
In the instant case there would also be a failure of justice unless the estate of Pedro O.
Fragrante is considered a "person", for quashing of the proceedings for no other reason
than his death would entail prejudicial results to his investment amounting to
P35,000.00 as found by the commission, not counting the expenses and disbursements
which the proceeding can be presumed to have occasioned him during his lifetime, let
alone those defrayed by the estate thereafter. In this jurisdiction there are ample
precedents to show that the estate of a deceased person is also considered as having
legal personality independent of their heirs. Among the most recent cases may be
mentioned that of "Estate of Mota vs. Concepcion, 56 Phil., 712, 717, wherein the
principal plaintiff was the estate of the deceased Lazaro Mota, and this Court gave
judgment in favor of said estate along with the other plaintiffs in these words:
. . . the judgment appealed from must be affirmed so far as it holds that defendants
Concepcion and Whitaker are indebted to he plaintiffs in the amount of P245,804.69 . . .
Under the regime of the Civil Code and before the enactment of the Code of Civil
Procedure , the heirs of a deceased person were considered in contemplation of law as
the continuation of his personality by virtue of the provision of article 661 of the first

Code that the heirs succeed to all the rights and obligations of the decedent by the mere
fact of his death. It was so held by this Court in Barrios vs. Dolor, 2 Phil., 44, 46.
However, after the enactment of the Code of Civil Procedure , article 661 of the Civil
Code was abrogated, as held in Suiliong & Co. vs. Chio-Taysan, 12 Phil., 13, 22. In that
case, as well as in many others decided by this Court after the innovations introduced
by theCode of Civil Procedure in the matter of estates of deceased persons, it has been
the constant doctrine that it is the estate or the mass of property, rights and assets left
by the decedent, instead of the heirs directly, that becomes vested and charged with his
rights and obligations which survive after his demise.
The heirs were formerly considered as the continuation of the decedent's personality
simply by legal fiction, for they might not have been flesh and blood the reason was
one in the nature of a legal exigency derived from the principle that the heirs succeeded
to the rights and obligations of the decedent. Under the present legal system, such
rights and obligations as survive after death have to be exercised and fulfilled only by
the estate of the deceased. And if the same legal fiction were not indulged, there would
be no juridical basis for the estate, represented by the executor or administrator, to
exercise those rights and to fulfill those obligations of the deceased. The reason and
purpose for indulging the fiction is identical and the same in both cases. This is why
according to the Supreme Court of Indiana in Billings vs. State,supra, citing 2 Rapalje &
L. Dictionary, 954, among the artificial persons recognized by law figures "a collection of
property to which the law attributes the capacity of having rights and duties", as for
instance, the estate of a bankrupt or deceased person.
Petitioner raises the decisive question of whether or not the estate of Pedro O.
Fragrante can be considered a "citizen of the Philippines" within the meaning of section
16 of the Public Service Act, as amended, particularly the proviso thereof expressly and
categorically limiting the power of the commission to issue certificates of public
convenience or certificates of public convenience and necessity "only to citizens of the
Philippines or of the United States or to corporations, copartnerships, associations, or
joint-stock companies constituted and organized under the laws of the Philippines", and
the further proviso that sixty per centum of the stock or paid-up capital of such entities
must belong entirely to citizens of the Philippines or of the United States.

Within the Philosophy of the present legal system, the underlying reason for the legal
fiction by which, for certain purposes, the estate of the deceased person is considered a
"person" is the avoidance of injustice or prejudice resulting from the impossibility of
exercising such legal rights and fulfilling such legal obligations of the decedent as
survived after his death unless the fiction is indulged. Substantially the same reason is
assigned to support the same rule in the jurisdiction of the State of Indiana, as
announced in Billings vs. State, supra, when the Supreme Court of said State said:
. . . It seems reasonable that the estate of a decedent should be regarded as an artificial
person. it is the creation of law for the purpose of enabling a disposition of the assets to
be properly made . . .
Within the framework and principles of the constitution itself, to cite just one example,
under the bill of rights it seems clear that while the civil rights guaranteed therein in the
majority of cases relate to natural persons, the term "person" used in section 1 (1) and
(2) must be deemed to include artificial or juridical persons, for otherwise these latter
would be without the constitutional guarantee against being deprived of property without
due process of law, or the immunity from unreasonable searches and seizures. We take
it that it was the intendment of the framers to include artificial or juridical, no less than
natural, persons in these constitutional immunities and in others of similar nature.
Among these artificial or juridical persons figure estates of deceased persons. Hence,
we hold that within the framework of the Constitution, the estate of Pedro O. Fragrante
should be considered an artificial or juridical person for the purposes of the settlement
and distribution of his estate which, of course, include the exercise during the judicial
administration thereof of those rights and the fulfillment of those obligations of his which
survived after his death. One of those rights was the one involved in his pending
application before the Public Service Commission in the instant case, consisting in the
prosecution of said application to its final conclusion. As stated above, an injustice
would ensue from the opposite course.
How about the point of citizenship? If by legal fiction his personality is considered
extended so that any debts or obligations left by, and surviving, him may be paid, and
any surviving rights may be exercised for the benefit of his creditors and heirs,
respectively, we find no sound and cogent reason for denying the application of the

same fiction to his citizenship, and for not considering it as likewise extended for the
purposes of the aforesaid unfinished proceeding before the Public Service Commission.
The outcome of said proceeding, if successful, would in the end inure to the benefit of
the same creditors and the heirs. Even in that event petitioner could not allege any
prejudice in the legal sense, any more than he could have done if Fragrante had lived
longer and obtained the desired certificate. The fiction of such extension of his
citizenship is grounded upon the same principle, and motivated by the same reason, as
the fiction of the extension of personality. The fiction is made necessary to avoid the
injustice of subjecting his estate, creditors and heirs, solely by reason of his death to the
loss of the investment amounting to P35,000, which he has already made in the ice
plant, not counting the other expenses occasioned by the instant proceeding, from the
Public Service Commission of this Court.
We can perceive no valid reason for holding that within the intent of the constitution
(Article IV), its provisions on Philippine citizenship exclude the legal principle of
extension above adverted to. If for reasons already stated our law indulges the fiction of
extension of personality, if for such reasons the estate of Pedro O. Fragrante should be
considered an artificial or juridical person herein, we can find no justification for refusing
to declare a like fiction as to the extension of his citizenship for the purposes of this
proceeding.
Pedro O. Fragrante was a Filipino citizen, and as such, if he had lived, in view of the
evidence of record, he would have obtained from the commission the certificate for
which he was applying. The situation has suffered but one change, and that is, his
death. His estate was that of a Filipino citizen. And its economic ability to appropriately
and adequately operate and maintain the service of an ice plant was the same that it
received from the decedent himself. In the absence of a contrary showing, which does
not exist here, his heirs may be assumed to be also Filipino citizens; and if they are not,
there is the simple expedient of revoking the certificate or enjoining them from inheriting
it.
Upon the whole, we are of the opinion that for the purposes of the prosecution of said
case No. 4572 of the Public Service Commission to its final conclusion, both the

personality and citizenship of Pedro O. Fragrante must be deemed extended, within the
meaning and intent of the Public Service Act, as amended, in harmony with the
constitution: it is so adjudged and decreed.
Decision affirmed, without costs. So ordered.
Moran, C.J., Pablo, Bengzon, Briones, Padilla and Tuason, JJ., concur.
Paras, J., I hereby certify that Mr. Justice Feria voted with the majority.
Separate Opinions
PERFECTO, J., dissenting:
Commonwealth Act No. 146 reserves to Filipino citizens the right to obtain a certificate
of public convenience to operate an ice plant in San Juan, Rizal. The limitation is in
accordance with section 8 of Article XIV of the Constitution which provides
No franchise, certificate, or any other form of authorization for the operation of a public
utility shall be granted except to citizens of the Philippines or to corporations or other
entities organized under the laws of the Philippines, sixty per centum of the capital of
which is owned by citizens of the Philippines, nor such franchise, certificate or
authorization be exclusive in character or for a longer period than fifty years. No
franchise granted to any individual, firm or corporation, except under the condition that it
shall be subject to amendment, alteration, or repeal by Congress when the public
interest so requires.
The main question in this case is whether the estate of Pedro O. Fragrante fulfills the
citizenship requirement. To our mind, the question can be restated by asking whether
the heirs of Pedro O. Fragrante fulfill the citizenship requirement of the law.
The estate is an abstract entity. As such, its legal value depends on what it represents.
It is a device by which the law gives a kind of personality and unity to undetermined
tangible persons, the heirs. They inherit and replace the deceased at the very moment
of his death. As there are procedural requisites for their identification and determination
that need time for their compliance, a legal fiction has been devised to represent them.
That legal fiction is the estate, a liquid condition in process of solidification.

The estate, therefore, has only a representative value. What the law calls estate is, a
matter of fact, intended to designate the heirs of the deceased. The question, therefore,
in this case, boils down to the citizenship of the heirs of Fragrante.
There is nothing in the record to show conclusively the citizenship of the heirs of
Fragrante. If they are Filipino citizens, the action taken by the Public Service
Commission should be affirmed. If they are not, it should be reversed.
Petitioner alleges that the estate is just a front or dummy for aliens to go around the
citizenship constitutional provision. It is alleged that Gaw Suy, the special administrator
of the estate, is an alien.
We are of the opinion that the citizenship of the heirs of Fragrante should be determined
by the Commission upon evidence that the party should be present. It should also
determine the dummy question raised by the petitioner.
We are of opinion and so vote that the decision of the Public Service Commission of
May 21, 1946, be set aside and that the Commission be instructed to receive evidence
of the above factual questions and render a new decision accordingly.